The stock market is set to react to the announcement that President Joe Biden will not seek reelection, which is expected to bring significant volatility.
Medicare patients are projected to save $1.5 billion on ten prescription medications, but this political shift could create economic uncertainty as Democrats rally behind a new candidate. Biden has endorsed Vice President Kamala Harris as the potential nominee.
Market analysts predict that if Biden withdraws from the race, the immediate response could lead to volatility. Josh Thompson, CEO of Impact Health USA, noted that investors typically favor stability, and such a major change in the political landscape may disrupt that stability.
This uncertainty might drive investors to seek safe-haven assets, including gold, silver, and the Swiss franc, which are generally less affected by political and economic shifts.
Additionally, there could be a pause in what is referred to as the “Trump Trade.” This term describes the market’s activities and investor behavior in response to the possibility of a second Trump administration. Former President Donald Trump, who previously fostered business-friendly policies, has gained traction since outperforming Biden in debates and surviving an assassination attempt. Stocks in sectors such as healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group are seen as potential beneficiaries of a second Trump presidency.
Analyst Ed Mills from Raymond James mentioned that while they would maintain their electoral odds of 60% for Trump and 40% for Biden or another Democratic candidate, they anticipate a slowdown in the “Trump trade” as the market reevaluates the election landscape without Biden in the race.